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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29782
Experience:  Taxes, Immigration, Labor Relations
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Lev. My spouse died last year and I have low earned income

Customer Question

Hello Lev. I'm Carrie. My spouse died last year and I have low earned income (under 15K) so I have been receiving the full SS benefit. I have other investments that the SS office told me would not affect my benefit because they'd be reported as interest income vs. earned income. My husband had a million dollar life insurance policy so it is possible I will be in a higher tax bracket next year after all interest income is accounted for. I have a traditional IRA for myself and my husband's beneficiary IRA. Was thinking about converting both of them to a Roth before 10/15 (if I can). I know I'd have to pay taxes on the conversion which is no problem but I'm concerned about how the income on the conversions will be classified (earned or otherwise) in terms of the impact that would have on my SS benefit. I am trying to plan so I continue to receive the full SS benefit until I am remarried or my son turns 16, whichever comes first. Thank you.
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.

That investment income will NOT affect your social security benefits.
Only earned income (wages or self-employment income ) may affect your social security benefits and only if you are below the full retirement age.

Expert:  Lev replied 2 years ago.

However - because in that year your income will increase that might affect HOW your social security are taxed.

A simple test is as following

- take a half of social security benefits

- PLUS other taxable income

- if the total is less than $25000 (for singles) or $32,000 (for married couples filing jointly) - none of social security benefits would be taxable

- if the total is more than the threshold - we would need to use a special worksheet to determine the taxable portion..

I will help to estimate possible tax liability.for that we need a full list of you income filing status and deductions.

We may chat or have a phone conversation if needed.